Tyler’s macro experts, Hugh and Scott don’t seem to understand what economic growth is for, or how to measure it.
People, a country with a zero percent change in its overall GDP combined with a shrinking population is actually generating higher living standards for its citizens.
In other words, for most economic purposes, it’s per-capita growth that we should be measuring.
Sure, the raw size of the economy might be a problem for debt ratios and total war, but I’d rather live in an economy with zero change in GDP and a population growth rate of -1% than an economy with a1% growth rate in GDP and a population growth rate of 2%.
Living standards are rising in the first case and falling in the second case.
This is why the worry about, “the Chinese economy may be bigger than the US economy” makes no sense from an economics standpoint. China is still a relatively poor country in terms of income per capita or median income.
Sure, Japan could do a lot of things better. It could be more open to women in the workforce (I think this may be starting to happen). It could be more open to trade and investment.
But it is very very far from being an economic disaster.
The first lady of Zimbabwe, Grace Mugabe, enrolled in a doctoral program in Sociology at the University of Zimbabwe back in July.
Now word comes that, two months later, She has earned her PhD!
“According to the state owned Herald Newspaper, her thesis was on the changing social structure and functions of the family which involved a study in a children’s home.”
She was hooded by the Chancellor of the University. Perhaps you’ve heard of him, his name is Bobby Mugabe!
Greatness just runs in some families.
Hat tip to SS
I just found an interesting NBER working paper (gated) looking at the frustrations of trying to reform the Indian bureaucracy. The paper is titled “Deal with the Devil: The Successes and Limitations of Bureaucratic Reform in India” and is written by Iqbal Dhaliwal and Rema Hanna.
It reinforces the argument that technology is no panacea in these types of reform. There seems to be no easy answers or shortcuts to bringing about real reform. Here is a shortened version of their abstract:
Employing a technological solution to monitor the attendance of public-sector health care workers in India resulted in a 15 percent increase in the attendance of the medical staff. Despite initiating the reform on their own, there was a low demand among all levels of government–state officials, local level bureaucrats, and locally-elected bodies—to use the better quality attendance data to enforce the government’s human resource policies due to a fear of generating discord among the staff. These fears were not entirely unfounded: staff at the treatment health centers expressed greater dissatisfaction at their jobs and it was also harder to hire new nurses, lab technicians and pharmacists at the treatment health centers after the intervention. Thus, this illustrates the implicit deal that governments make on non-monetary dimensions—truancy, allowance of private practices—to retain staff at rural outposts in the face of limited budgets and staff shortages.
The World Bank classifies countries around the world into income groupings (middle class, upper middle class), understandably using arbitrary and subjective cut-off points. I’d like to propose using Bill Gates’ wealth as a new cut-off point. The above map, courtesy of @Amazing_Maps, depicts in red all of the countries that have GDPs lower than Gates’s wealth.
I think reasonable people can agree that if a country’s total income is outweighed by the wealth of a single (albeit incredibly rich) individual, than that country’s economy has some room for improvement!
Apparently the Nicaraguans aren’t the only ones envious of the Panama Canal. The Egyptian government, to promote the recent announcement of a 45 mile extension to the Suez Canal, commissioned new stamps portraying the canal in all its glory. Just one problem with the plan. The stamp designers have either never seen the Suez Canal or just like the Panama Canal better. Take a look:
The Telegraph has a summary of the embarrassing blunder, with this awesome line:
“A government official said that the postal service was aware of the mix up and was trying to rectify the situation.” Makes me wonder what they are doing to rectify the situation.” Looking for some more accurate photos?
Man oh man, Mexico has not changed much in the 15 years since me and Mrs. Angus lived there. The PRI is back in power and the PRI is still the PRI.
Pretty-boy EPN’s telecom reforms went through way too easily for there not to have been a deal with Slim Shady, and indeed, we can see that deal starting to take shape in the amorphous form of a huge infrastructure boondoggle, namely a multi-billion dollar airport project.
As we noted last week, Slim’s yerno won the design contract, and now word comes that Slim will be bidding on the construction contract as well.
“Slim’s interest in the project was addressed on Tuesday by Luís Zarate, the President of Mexico’s Chamber of the Construction Industry. Zarate said that nine Mexican construction firms, including Grupo Ica, a private Mexican infrastructure construction company, and Grupo Carso, a global conglomerate company owned by Slim, have formed a committee to bid for the airport, according to Reuters.”
This is classic Mexican style “competition”. Get all interested parties in a room, divide up the spoils, and present a single bid. Meet the new boss, same as the old boss.
The airport design sounds interesting to say the least. Here’s Sir Norman Foster describing it:
“It doesn’t have a conventional roof. It doesn’t have vertical walls. It doesn’t have columns in the normal sense.”
No roof? Crooked walls? “unconventional” columns? Hell, maybe I should bid!
The Devil’s Excrement has had a series of excellent posts recently on the economic and political disaster that is Venezuela. Here is one called “Is there a government in Venezuela?” It highlights the incredible inconsistency of policymaking and shows that the top people in the government are not even close to being on the same page. And Maduro isn’t even on the same page as himself, in the sense that he’s cannot decide which direction to go. The post (and blog) is well worth reading in full, but the last outraged paragraphs of the piece are especially good:
Who runs Venezuela? I am starting to think nobody. This is a collection of individuals with no apparent command or direction, led by an indecisive man. I don’t think Maduro went to Cuba to receive orders. I believe he went to Cuba to ask Fidel which of the many proposals he should follow. And Fidel likely told him to just hold tight, try to sell Citgo, see how long they can last. And if they can’t sell Citgo, you can make very tough decisions, like hold payment on debt, borrow somewhere and try to ride it out. But Nicolas, Fidel likely told him: You are not Hugo.
And so the country drifts into som sort of economic black hole. Today it is fingerprint scanners, tomorrow it will be some different imaginary battle. But it will always be about attacking the consequences, not the causes. Those, they will not touch. Maybe a small adjustment in the price of gas. Maybe move the Bs. 6.3 per US$ rate to the Sicad 1 rate. But that’s it. In the absence of Government, there will be no decisions. No real policy changes until 2016. At the earliest.